The legal battles between Samsung and Apple have reached near legendary proportions. Apple won a major decision against Samsung in U.S. courts where the jury awarded Apple $1 billion in damages. Samsung is appealing that ruling and is even trying to get the case thrown out of court by alleging juror misconduct.

Reports are now coming in that Samsung Electronics has recently raised the price it charges for mobile processors to Apple. Samsung supplies the processors for the popular Apple iPad and iPhone.

According to a source claiming to be familiar with negotiations between the companies, Samsung increased the price of processors it provides the Apple by 20%.

"Samsung Electronics recently asked Apple for a significant price raise in (the mobile processor known as) application processor," the person was quoted as saying in the report. "Apple first disapproved it, but finding no replacement supplier, it accepted the (increase.)"

Apple was, understandably, was unhappy with the price hike and initially refused to pay it. However, it came back and agreed to pay the additional costs when no alternative provider could be found.

The source also says that Apple buys all of its application processors from Samsung and purchased an estimated 130 million units last year. The source also estimates that Apple will purchase over 200 million application processors from Samsung this year.

One last tidbit the source noted was that Samsung has a long-term contract to provide the application processors to Apple that runs through 2014. Neither Apple nor Samsung have officially commented.

I really admire Tony. His ability to suspend reality is breath taking. For example, the idea of the iPhone 5 being the best selling handset is inherently nonsense. Android is outselling iPhones year after year at this point so they, not Apple, have the majority of market share. Apple can no longer compete on technical specifications or for fab capacity the way it could years ago - it's no longer those fabs' supreme customer.

Also, Apple has still not managed to diversify it's products. It's one pillar to success (another being innovation/relevance as Sharp/Panasonic/Sony are learning to their detriment). What other niche can Apple now move into? Where does it go beyond iPads?

Answer? Nowhere. Que selling of Apple stock as reality bites in... Oh, yes, and that is already reality - Apple stock is heading downhill these days from its overinflated pumped up high.